Study suggests London City Airport site could be put to more economically & socially efficient use by closing airport

Date added: April 11, 2014

A new report from the New Economics Foundation (NEF) makes the case for closing London’s City Airport and redeveloping the site to create more jobs, boost local business and build new homes. The report looked at the actual contribution, and the restrictions, caused by the airport on the surrounding area, and it has come to some conclusion that may seem surprising. They found London City Airport creates little value to the UK economy – despite occupying 500,000 square metres at the heart of London. Its direct contribution in 2011 was £110m – compared to £513 million generated by the nearby ExCeL Centre. It provides relatively few jobs, and restrictions on development near the airport due to the public safety zone and height restrictions in the nearby area limit many potentially more efficient uses of the land. Local residents bear all the costs but reap few of the benefits – the average salary of a London City Airport passenger is over £90,000, while 40% of Newham residents earn less than £20,000. Only about 28% of the airport jobs go to Newham people. London’s transport no longer needs City Airport – City Airport’s passengers account for just 2.4% of London’s total flight demand. These passengers could be readily absorbed by Heathrow, Gatwick or Stansted. By 2019 Crossrail will allow City workers to reach Heathrow in just 30 minutes.
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Close London City Airport – new NEF report

A new report from the New Economics Foundation (NEF) makes the case for closing London’s City Airport and redeveloping the site to create jobs, boost local business and build new homes. Some key points:

• City Airport creates little value – despite occupying 500,000 square metres at the heart of London, its direct contribution to the UK economy in 2011 was £110m – less than a fifth of the nearby ExCeL Exhibition and Conference Centre.

• City Airport costs jobs – the airport has never delivered on initial jobs promises and its safety crash zone limits business development across a 3 mile area. The extra 1500 jobs from current plans to expand City Airport compare poorly with the 9,000 jobs expected to result from the nearby Silvertown Quays development.

• Local residents bear all the costs but reap none of the benefits – the average salary of a London City Airport passenger is over £90,000, while 40% of Newham residents earn less than £20,000. Some 18,000 local residents suffer high levels of noise pollution and poor air quality.

• London transport no longer needs City Airport – City Airport’s passengers account for just 2.4% of London’s total flight demand, and its numbers could be readily absorbed by Heathrow, Gatwick or Stansted. By 2019 Crossrail will allow City workers to reach Heathrow in just 30 minutes.

The need to cut noise, pollution and carbon emissions and tackle economic and social inequalities demands urgent reform of how aviation is managed in our cities.

New research from NEF exposes London City Airport as an outdated and unproductive use of precious inner city land and calls for it to be closed at the soonest opportunity.

There are more productive things we could do with London City Airport

The airport represents a missed social and economic opportunity for the Royal Docks area. Alternative developments for the Royal Docks would outstrip City Airport on economic value. Despite its much larger footprint, the airport’s direct contribution to the UK economy in 2011 (£110 million) is just a fifth that of the nearby ExCeL Exhibition and Conference Centre (£513 million). City Airport’s own estimates suggest a contribution of £750m per year to the UK economy, but the majority of this is generated through inbound passengers’ spending which would be retained if passengers were directed through other airports.

The airport also punches below its weight on job creation, supporting the equivalent of only 1,900 full-time jobs. In contrast the ExCel is predicted to support 53,000 across the UK by 2017. Only 27% of jobs created by the airport go to local Newham residents, well below the target 35%.

The airport can be closed without loss of transport capacity

Crossrail will vastly improve access to London’s other airports once completed in 2019. Travelling from Liverpool Street to Heathrow will take half an hour, just 4 minutes longer than the journey to London CityAirport.

Other London-area airports have capacity to take on City Airports passengers. City Airport is a niche airport, catering for only 2.4% of London’s total aviation demand. With the exception of Luton, every other London-area airport has enough spare capacity to single-handedly absorb London City Airport’s passengers, although of course in reality the displaced passengers would be spread between them.

The benefits of London City Airport are enjoyed by a small, wealthy minority

The benefits of London City Airport accrue mainly to its wealthy business clientele. Three quarters of inbound journeys end in Canary Wharf, the City of London or the City of Westminster, and the average salary of the airport’s users is £92,000. This contrasts starkly with the deprivation in surrounding Newham, where residents have lowest average incomes in London, 40% earning below 20,000.

The environmental costs of City Airport land squarely on neighbouring communities. Air pollution is a major problem across London, but Newham is particularly badly affected. Death rates in the borough from chronic heart and lung diseases – commonly exacerbated by air pollution – are among the highest in London.

Significant levels of noise are experienced by 18,000 people around City Airport. The World Health Organisation recommends a noise level of no more than 50 to 55dB for residential areas, but in the Royal Docks area every local school experiences noise at levels of 57dB.

Helen Kersley, lead author and economist at NEF said:

“Given our current dire shortage of homes, as well as the UK’s international commitments to cutting its carbon emissions, we must seriously question the logic of locating an airport on precious inner city land.London City Airport places a significant environmental and social burden on neighbouring communities, and gives back very little in return.”

“Now is the perfect time to think about alternatives. 70% of the world population is expected to live in urban areas by 2050 – London can lead the way in demonstrating how we can reduce carbon emissions, live within our environmental limits, and achieve a fairer distribution of economic benefits.”

John Stewart, Chair HACAN East, said:

“We have no doubt that the replacement of the airport with alternative businesses would benefit the local and national economy. The development of community land trust model of ownership would complement many of the exciting new developments which have taken place in the area in recent years”.

“This ground-breaking report from NEF shows that closure of the airport would not only help residents in East London blighted by noise and air pollution, but would bring benefits to the economy. It makes complete economic, social and environmental sense.”

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1. The New Economics Foundation (NEF) is an independent think tank that specialises in innovative economic thinking – www.neweconomics.org

2. The Royal Docks revival report waslaunched at an event on Thursday 10April 2014 at The Crystal, Royal Docks.

London City Airport ‘should close’, think tank says

London City Airport says if it closed, 2,000 people would be out of work

London’s City Airport should close and its site be redeveloped to create jobs, boost local business and build new homes, a think tank has said.

The airport accounts for just 2.4% of London’s total flight demand, the report from the New Economics Foundation (NEF) said.

Its passengers could use Heathrow, Gatwick or Stansted, NEF claimed.

A London City Airport spokeswoman said the airport “facilitates inward investment and economic growth”.

‘Gives very little’

The report by NEF claimed: “City Airport creates little value – despite occupying 500,000 square metres at the heart of London, its direct contribution to the UK economy in 2011 was £110m – less than a fifth of the nearby ExCeL Exhibition and Conference Centre.”

NEF economist Helen Kersley said: “Given our current dire shortage of homes, as well as the UK’s international commitments to cutting its carbon emissions, we must seriously question the logic of locating an airport on precious inner city land.

“London City Airport places a significant environmental and social burden on neighbouring communities and gives back very little in return.”

A London City Airport spokeswoman said: “The only airport in London provides a direct route to the capital’s business, financial and political centres, facilitating inward investment and economic growth.”

She added closing the airport would put 2,000 people out of work, prevent the creation of a further 1,500 jobs by 2023 and remove £750m a year from the economy.

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London City Airport Worth More as a Building Site, Study Argues

By Kari Lundgren April 10, 2014 (Bloomberg)

London City Airport, the closest terminal to the capital’s financial district, contributes little to the U.K. economy and should be closed, according to a report today from the New Economics Foundation.

The airport added about 110 million pounds ($184 million) to the U.K. economy last year, compared with the 513 million pounds brought in by the ExCel exhibition and conference center across the River Thames, according to the study. The facility’s passengers, who account for about 2.4 percent of London airport traffic, could easily be absorbed by other terminals, they said.

Located 6 miles from London’s main financial district on a former dockside, London City is favored by business travelers on short-haul trips. The average income of its passengers is 92,000 pounds, in an area of the capital where 40 percent of people earn less than 20,000 pounds, NEF said, citing data from a planning statement on the local Newham council website.

“We must seriously question the logic of locating an airport on precious inner-city land,” NEF economist Helen Kersley, the report’s lead author, said in a statement. “London City Airport places a significant environmental and social burden on neighboring communities.”

London City handled 73,713 flights and 3.4 million people in 2013, ranking as Britain’s 15th largest airport. While the facility puts its annual economic contribution at 750 million pounds, the bulk comes from spending by inbound passengers and would stay in the U.K. if flights went elsewhere, the NEF said, refering to figures in the hub’s Transforming East London study.

Air France Sale

Opened in 1987 and majority owned by Global Infrastructure Partners, London City’s biggest operator is Air France-KLM Group (AF)’s unprofitable CityJet Ltd. arm, which the carrier is seeking to sell to turnaround specialist Intro Aviation GmbH.

Today’s report is not the first to call for the closing of a London airport. In July, Mayor Boris Johnson said the government could buy Heathrow, Europe’s busiest hub, for 15 billion pounds and use the 1,220-hectare (3,000 acre) site to build 100,000 homes, creating an entirely new borough that would help ease a national housing shortage.

The NEF is an unaffiliated, donation-funded think-tank that seeks to promote social, economic and environmental change, according to its website.